USDMYR Technical Analysis

The US Dollar dropped against the Ringgit on Friday and is now trading at 4.3570. The recent downward movement can be explained after the release of data from the US Consumer Price Index (CPI), which brought inflation in line with market expectations (6.5% forecast). The market interpreted that as US inflation is coming under control, and the Federal Reserve (FED) will likely slow down the pace of interest rate hikes in the second half of 2023. Some specialists are talking about a 25-basis point in the interest rate from now on. All of this points to a further devaluation of the USD in the short and medium term. With lower inflation, interest rates for the USD will be lower, which will make investors look for more interesting investment alternatives, selling USD to buy riskier assets, such as stocks or other currencies. From a technical point of view, USDMYR has shown the beginning of the break of the support region at 4.3650 and it is possible that it will drop as low as 4.30 over the next few days.